Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Fidelity National Information Services (NYSE:FIS) from the perspective of those elite funds.
Hedge fund interest in Fidelity National Information Services (NYSE:FIS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ventas, Inc. (NYSE:VTR), PACCAR Inc (NASDAQ:PCAR), and Western Digital Corp. (NASDAQ:WDC) to gather more data points.
In the 21st century investor’s toolkit there are plenty of tools stock traders have at their disposal to value stocks. Two of the most underrated tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a very impressive margin (see the details here).
With all of this in mind, let’s take a gander at the latest action regarding Fidelity National Information Services (NYSE:FIS).
Hedge fund activity in Fidelity National Information Services (NYSE:FIS)
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the second quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, William von Mueffling’s Cantillon Capital Management has the biggest position in Fidelity National Information Services (NYSE:FIS), worth close to $540.6 million, corresponding to 11.5% of its total 13F portfolio. On Cantillon Capital Management’s heels is Scott Ferguson of Sachem Head Capital, with a $206.9 million position; 9.3% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism contain Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.
Seeing as Fidelity National Information Services (NYSE:FIS) has witnessed falling interest from hedge fund managers, it’s safe to say that there were a few hedgies that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Louis Bacon’s Moore Global Investments sold off the largest stake of all the hedgies watched by Insider Monkey, comprising about $21.6 million in stock. Jim Simons’s fund, Renaissance Technologies, also dumped its stock, about $6.4 million worth of shares. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Fidelity National Information Services (NYSE:FIS). We will take a look at Ventas, Inc. (NYSE:VTR), PACCAR Inc (NASDAQ:PCAR), Western Digital Corp. (NASDAQ:WDC), and Twitter Inc (NYSE:TWTR). This group of stocks’ market caps are similar to FIS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $853 million. In the case of FIS, that figure was $1.57 billion. Western Digital Corp. (NASDAQ:WDC) is the most popular stock in this table, while Ventas, Inc. (NYSE:VTR) is the least popular one with only 22 bullish hedge fund positions. Fidelity National Information Services (NYSE:FIS) is not the most popular stock in this group, but hedge fund interest is still above average. Although this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WDC might be a better candidate to consider a long position.